Which of the Following Rises During Recessions

question 20

Multiple Choice

Which of the following rises during recessions?

• A)layoffs and consumer spending
• B)layoffs but not consumer spending
• C)consumer spending but not layoffs
• D)neither layoffs nor consumer spending

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Definitions:

Keynesian Theory

Keynesian Theory is an economic theory stating that government intervention through fiscal and monetary policy is necessary to manage aggregate demand and address economic cycles.

Government Intervention

Actions taken by a government to affect the economy, which can include regulations, subsidies, tariffs, and monetary policies.

Expected Rate Of Profit

The anticipated return on an investment, taking into account the risk and time value of money.

Classical Theory

Refers to an economic theory that asserts that the economy is self-regulating, markets are best left alone without government intervention, and supply creates its own demand.